Connection charges recover the cost of installing and maintaining assets that allow parties to connect to the transmission system and which are not normally used by any other party. They are calculated every January for each user and charged monthly, as detailed in CUSC Section 14. The calculation takes account of the asset value, asset age and maintenance costs. Generators normally do not have connection charges in England and Wales, as the substation busbars are considered to be infrastructure assets.
The connection charge consists of a capital component and a non-capital component. The components are calculated using the Gross Asset Value (GAV) and the Net Asset Value (NAV) of the connection assets. The GAV represents the total initial cost of constructing the connection assets, whilst the NAV represents mid year depreciated GAV of the asset. As the connection charge is recalculated annually, each year the GAV has to be rebased to account for inflation and the NAV has to be reduced to account for the value paid off in the previous year. Users can opt to make a capital contribution to pay off some or all of the GAV, reducing the capital component of the connection charge.
If a user terminates either the whole site or just the connection agreement before the assets have reached the end of their asset life, the User is liable for a termination charge. This charge is based on the remaining net asset value of the connection, and once received is held in a provisions account as the charge can be repayed to the terminating user if the assets are re-used.
For more detailed information contact your Customer Account Manager, alternatively you can contact our Charging Team at firstname.lastname@example.org.
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